IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

INDIANA MICHIGAN POWER CO., : Case No. 2:12-CV-00861 

 : 

 Plaintiff, : JUDGE ALGENON L. MARBLEY 

 : 

 v. : 

 : Magistrate Judge Mark Abel 

SIEMENS ENERGY, INC., : 

 : 

 Defendant. : 

 

OPINION AND ORDER 

I. INTRODUCTION 

This matter is before the Court on Defendant Siemens Energy Inc.’s (“Defendant” or 

“Siemens”) Motion to Dismiss Plaintiff Indiana Michigan Power Company’s Complaint. 

(Doc. 1). Plaintiff sued Defendant alleging breach of contract (Count I); breach of warranty 

(Count II); and restitution (Count III) in regard to a contract for the sale and subsequent repair of 

a turbine rotor and related equipment. Defendant Siemens moves to dismiss Counts I and II of 

Plaintiff’s Complaint for failure to state a claim upon which relief can be granted. (Doc. 15). 

For the foregoing reasons, Defendant’s Motion is GRANTED and Counts I and II of this action 

are hereby DISMISSED. 

II. BACKGROUND 

A. Factual Background 

1. The Parties 

 Plaintiff, Indiana Michigan Power Company (“Plaintiff” or “I&M”), is an Indiana 

corporation whose principal place of business is in Fort Wayne, Indiana. I&M supplies 

electricity to more than a half million customers in Indiana and Michigan. Approximately 36% 

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of that electricity is generated by the Cook Plant located in Michigan. The Cook Plant consists of 

two systems – Unit 1 and Unit 2 – through which water is circulated in a closed loop between a 

reactor core and a steam generator. The steam produced in the steam generator travels into a 

high-pressure turbine, three low-pressure turbines, and an electric generator. The steam causes 

the turbines to spin, thereby generating electricity. 

Defendant, Siemens, is a Florida Corporation whose principal place of business is in 

Florida. Siemens sells turbine rotors and related equipment to corporations such as I&M. 

2. Relevant Contract Provisions 

 In August 2004, I&M and Siemens entered into Contract C-11468 (the “Contract”) for 

new low-pressure turbine rotors and related equipment to be designed, engineered, fabricated, 

loaded, transported, assembled, and installed by Siemens. (Complaint, Doc.1, ¶ 10.) I&M 

agreed to pay Siemens a lump sum, the “Contract Price,” for the equipment and services 

provided pursuant to the Contract. (Contract, Doc. 17, Art. 8.) The Contract between I&M and 

Siemens covered the installation of three LP turbines, and had a price of $37,685,000. (Contract, 

Doc. 17, Art. 9.) 

At issue are two provisions in the Contract: Article 13, which provides for Warranties 

(the “Warranty”); and Article 22, a Limitation of Liability under the Contract (“Limitation of 

Liability”). Id. The Warranty provision contains six specific warranties covering different 

equipment, services, and issues; however, only the warranty covering “Major Equipment” is at 

issue in the instant case. (Contract, Doc. 17, Art. 13.) The Warranty provision in Article 13 

states: 

[Siemens] warrants that the Major Equipment furnished to [I&M], including any 

part repaired or replaced by [Siemens] during the Major Equipment Warranty 

Period, will be free of defects in workmanship and materials until ten (10) years 

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from the date of shipment of the original Major Equipment to Owner (the Major 

Equipment Warranty Period). 

If during the Major Equipment Warranty Period [Siemens] is promptly notified in 

writing that the Major Equipment fails to conform to the Major Equipment 

Warranty, [Siemens] will at its option and expense correct such nonconformity by 

repair or replacement. 

(Contract, Doc. 17, Art. 13.) “Major Equipment” covered by the Contract includes, among other 

equipment, the rotors and rotating blades. (Contract, Doc. 17, Art. 12.) The remedies set forth 

in the Contract are I&M’s exclusive remedies for defective or nonconforming equipment. 

Specifically, Article 19, which provides that the guarantees and remedies are exclusive, states: 

The guarantees set forth in Articles 13 through 17 are exclusive and are in lieu of 

all other warranties whether statutory, express, or implied (including all 

warranties of merchantability and fitness for a particular purpose, and all 

warranties arising from course of dealing or usage of trade). Correction of 

nonconformity in the manner and for the time period above shall constitute 

Contractor’s sole liability and Owner’s exclusive remedy for defective or 

nonconforming Equipment, Major Equipment, or Services whether claims of the 

Company are based in contract, in tort (including negligence and strict liability), 

or otherwise. 

(Capitalized in original) (Contract, Doc. 17, Art. 19.)1

 In addition to the general Warranty 

provision, the parties agreed to a provision limiting the liability of both parties in the event of 

repair or replacement of the turbine rotors. The Limitation of Liability states in its entirety: 

The parties expressly agree that neither party nor its suppliers will under any 

circumstances be liable under any theory of recovery, whether based on contract, 

in tort (including negligence and strict liability), under warranty, or otherwise, for: 

any indirect, special, incidental or consequential loss or damage whatsoever; 

damage to or loss of property or equipment; loss of profits or revenue; loss of use 

of owner’s material, equipment or power system; loss of data; increased costs of 

any kind, including but not limited to capital cost, fuel cost and cost of purchased 

or replacement power; or claims of customers. Damage suffered as a result of the 

unauthorized disclosure of proprietary information shall not be considered an 

excluded damage under this section. 

 

 1

 Originally the Guarantees and Remedies in Article 19 were limited to Articles 14 

through 17, but both parties amended the provision to include Article 13 and initialed the change. 

(Contract, Doc. 17, Art. 19; Motion to Dismiss, Doc. 15-1, at 4.) 

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The parties expressly agree that the remedies provided herein are exclusive and 

that under no circumstances shall the total aggregate liability of either party 

under any theory of recovery, whether based in contract, in tort (including 

negligence and strict liability), under warranty, or otherwise, exceed the total 

price paid to contractor under this agreement. 

The provisions of this article shall prevail over any conflicting or inconsistent 

provisions set forth elsewhere in this provision. 

(Capitalized in original; emphasis added.) (Contract, Doc. 17, Art. 22.) 

3. The Dispute 

On September 20, 2008, two of the low-pressure turbines suffered damage when turbine 

blades broke off their rotor while Unit 1 was at full power. (Complaint, Doc. 1, ¶ 12.) As a 

result, Unit 1 was shut down while the entire power train—the high-pressure turbine, three lowpressure turbines, electric generator, and supporting systems—and other related plant equipment 

were repaired. Id. 

After the equipment failure, I&M submitted a warranty claim to Siemens. (Complaint, 

Doc. 1, ¶ 13.) Siemens acknowledged receipt of the claim and exercised its option under the 

Warranty to repair the warranted equipment instead of replacing it. Id. Siemens alleges that its 

written acknowledgment of the warranty notice reserved the right to contest whether the repair 

work was covered by the warranty because Siemens had not yet completed any investigation as 

to the cause of the damage. (Motion to Dismiss, Doc. 15-1, at 6 n.2.) 

In order to facilitate the repairs, I&M shipped the damaged equipment from the Cook 

Plant in Michigan to a Siemens facility in North Carolina. (Complaint, Doc. 1, ¶ 14.) The 

necessary work was performed by Siemens pursuant to the Parties’ 2009 Amendments to the 

2004 Contract. (Contract, Doc. 17-1, Amend.4, Art.1.) The Amendments authorized payment 

of an additional amount for costs that exceeded the Contract limitation of liability and for 

additional work outside the scope of the Contract. Id. Siemens alleged that the expenses it 

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would incur by repairing the damaged equipment would exceed the Contract Price. (Complaint, 

Doc. 1, ¶ 15.) Siemens paid the costs up to the Contract Price, and required I&M to pay for 

repair costs above the Contract Price. Id. Siemens demanded payment from I&M before it 

would fulfill its warranty obligation based on the Limitation of Liability provision in the 

Contract. Id. 

I&M alleges that Siemens improperly included charges for profit, “overhead,” and other 

items not related to the actual cost of the warranty repair in calculating the amount of its 

purported expenses to repair the equipment. (Complaint, Doc. 1, ¶ 16.) I&M paid the amount 

demanded by Siemens, and now seeks to recover the millions of dollars it paid for repair work 

above the Contract Price. Id. at ¶ 18. I&M claims that Siemens should have performed this 

work at its own expense. Id. 

 Siemens argues that under the terms of the 2004 Contract its aggregate liability under 

any claim is not to exceed the total price paid under the Contract. (Motion to Dismiss, Doc. 15-1, 

at 2.) Siemens argues that the Contract terms—specifically the Limitation of Liability—are clear 

and unambiguous. Id. at 5. Siemens maintains that it is entitled to reimbursement for the 

substantial costs incurred up to the contractual limit of liability for the work performed in order 

to repair and replace the turbine rotors. Id. Siemens contends that I&M’s only possible claim 

for relief is restitution and that claims for breach of contract and breach of warranty are 

inapplicable. Id. 

B. Procedural Background 

On September 19, 2012, I&M filed a Complaint in this Court asserting breach of 

contract, breach of warranty, and a claim for restitution. (Doc. 1.) In Count I of its Complaint, 

I&M alleges that the parties entered into a valid contract, that I&M performed or substantially 

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performed all conditions precedent to Siemens’ liability under the Contract, that Siemens 

breached the Contract by refusing to perform properly its obligations under the Contract, and 

that I&M suffered damages as a result. 

In Count II, I&M makes two alternative allegations. First, I&M argues that Siemens 

breached the Warranty in the Contract by failing to repair or replace the defective equipment at 

its own expense. In the alternative, I&M contends that if Siemens did fully perform under the 

Contract by invoking the limited remedy provided by the Warranty then this remedy failed of its 

essential purpose. I&M argues that Siemens is responsible for the entire cost of remedying the 

damage caused by the failure of its equipment, including consequential damages caused by that 

failure. I&M requests contractual damages in both Counts. In the alternative to Counts I and II, 

I&M alleges in Count III that even if Siemens was owed some additional payment for its 

warranty repair work above the amount of the Contract Price, Siemens improperly included 

charges for profit, “overhead,” and other items not related to the actual expense of the warranty 

repair. (Complaint, Doc. 1, ¶ 29.) 

Siemens moves to dismiss Counts I and II of I&M’s Complaint for failure to state a claim 

upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure. (Doc.15.) Siemens argues that Counts I and II require dismissal because 

enforcement of these Counts alleging Breach of Contract and Breach of Warranty would violate 

the express Limitation of Liability agreed to in the 2004 Contract. Siemens does not seek to 

dismiss Count III at this time, for the amount of restitution depends on the disputed accounting 

of repair and replacement charges. I&M opposes the Motion to Dismiss Counts I and II 

(Doc.18.) The motions are fully briefed and ripe for decision. 

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III. STANDARD OF REVIEW 

 A case may be dismissed if the complaint does not state a claim on which relief can be 

granted. Fed.R.Civ.P. 12(b)(6). “A motion to dismiss for failure to state a claim is a test of the 

plaintiff’s cause of action as stated in the complaint, not a challenge to the plaintiff’s factual 

allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). Consequently, 

the Court must construe the complaint in the light most favorable to the non-moving party. Total 

Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 

2008); Murphy v. Sofamor Danek Gp., Inc., 123 F.3d 394, 400 (6th Cir. 1997). The Court is not 

required, however, to accept as true mere legal conclusions unsupported by factual allegations. 

Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 555, 

127 S.Ct. 1955 (2007)). 

 Although liberal, the Rule 12(b)(6) standard requires more than the bare assertion of legal 

conclusions to survive a motion to dismiss. Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 

1993) (citation omitted). The complaint must “’give the defendant fair notice of what the claim 

is, and the grounds upon which it rests.’” Nader v. Blackwell, 545 F.3d 459, 470 (6th Cir. 2008) 

(quoting Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200 (2007)). While a complaint need 

not contain “detailed factual allegations,” its “[f]actual allegations must be enough to raise a 

right to relief above the speculative level.” Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964 (2007). 

A complaint that suggests “the mere possibility of misconduct” is insufficient; rather, the 

complaint must state “a plausible claim for relief.” Iqbal, 129 S.Ct. at 1950 (citing Twombly, 550 

U.S. at 556). 

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IV. LAW AND ANALYSIS 

 Siemens moves this Court to dismiss Counts I and II of Plaintiff’s Complaint because 

I&M has not pled plausible claims for Breach of Contract or for Breach of Warranty. 

A. Breach of Contract Analysis 

In Count I, I&M alleges that Siemens breached the contract by refusing to perform 

properly its obligations under the Contract. Under Ohio law, a plaintiff must satisfy four 

elements to establish a breach of contract claim: 1) the existence of a binding contract; 2) the 

non-breaching party performed its contractual obligations; 3) a breach in contractual obligations 

by the other party; and 4) the non-breaching party suffered damages as a result of the breach. 

Wauseon Plaza Ltd. P'ship v. Wauseon Hardware Co., 156 Ohio App.3d 575, 582, 807 N.E.2d 

953 (Ohio Ct. App. 2004); Garofalo v. Chicago Title Ins. Co., 104 Ohio App.3d 95, 107, 661 

N.E.2d 218 (Ohio Ct. App. 1995). It is undisputed that the Contract executed by I&M and 

Siemens is a valid contract. The issue is whether there was a breach. I&M argues that the 

amount sought from Siemens is not affected by the Limitation of Liability provision and that the 

Warranty provision is independent and controlling. (Pl. Response, Doc. 18, at 9.) 

1. Limitation of Liability – Article 22 

Under Ohio law, interpretation of a written contract is a matter of law for initial 

determination by the Court. Construction Interior Sys., Inc. v. Marriott Family Rests., Inc., 984 

F.2d 749, 754 (6th Cir. 1993) (applying Ohio law); see also Long Beach Ass’n, Inc. v. Jones, 697 

N.E.2d 208, 209 (Ohio 1998). Moreover, contract interpretation is only turned over to the factfinder when the relevant contract language is ambiguous. Potti v. Duramed Pharms., Inc., 938 

F.2d 641, 647 (6th Cir. 1991) (applying Ohio law). The Court decides whether a contract is 

ambiguous as a matter of law. Id.

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The Contract provisions at issue unambiguously state that the Limitation of Liability is to 

prevail over the general Warranty. Allegations by I&M that they are independent are without 

merit. Under the Limitation of Liability, Siemens can under no circumstances be liable for any 

claims above the total Contract Price. (Contract, Doc. 17, Art. 22.) As the Supreme Court has 

explained, the ordinary rule with respect to the construction of contracts is that a more specific 

provision will prevail over one that is general in its terms. Mut. Life Ins. Co. v. Hill, 193 U.S. 

551, 558, 24 S.Ct. 538, 48 L.Ed. 788 (1904) (“[W]hen the parties express themselves in 

reference to a particular matter, the attention is directed to that, and it must be assumed that it 

expresses their intent; whereas a reference to some general matter, within which the particular 

may be included, does not necessarily indicate that the parties had the particular matter in 

thought.”). The Limitation of Liability—the more specific provision—is therefore controlling. It 

places a cap on claims for amounts in excess of the total Contract Price whether based in contract 

or warranty. 

I&M seeks to avoid the unambiguous language in the Limitation of Liability clause in 

order to assert a claim for breach of warranty. I&M fails, however, to state a basis for ignoring 

the parties agreed upon assignment of risk. See Kelly v. Med. Life Ins. Co., 509 N.E.2d 411, 411 

(Ohio 1987) (“The intent of the parties to a contract is presumed to reside in the language they 

chose to employ in the agreement.”). I&M alleges that Siemens breached the Contract by 

demanding that I&M pay for repair and replacement costs in excess of the Contract Price; 

however, the Complaint does not allege any facts to support voiding the contractual Limitation 

of Liability. Siemens’ demand complied with the terms of the Contract limiting Siemens’ repair 

costs to the Contract Price. 

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I&M contends further that Article 22 does not apply to repair expense and, therefore, the 

repair costs do not negate any contractual liability cap because repair costs are not a “liability” 

under Article 22. (Pl. Response, Doc. 18, at 9-10.) This narrow reading of the provision is 

misplaced. Article 22 includes “any theory of recovery, whether based in contract . . . [or] under 

warranty.” (Contract, Doc. 17, Art. 22.) Article 22 thus informs that a theory of recovery based 

on contract or warranty is a form of liability covered by the Contract. Siemens and I&M 

understood that costs associated with repair counted toward Article 22’s total aggregate liability. 

Both parties acknowledged in the agreed upon 2009 Amendment that Siemens could perform 

“warranty work that exceeds the Contract limitation of liability.” (Contract, Doc. 17, Amend. 

No. 4, Att. A, at 1.) I&M’s interpretation of Article 22 would lead to absurd results and render 

the Limitation of Liability meaningless. 

2. Enforceability of Article 22 Independent of Warranty Remedy 

I&M also asserts that the Limitation of Liability provision and the Exclusive Remedy 

clause are independently enforceable. (Pl. Response, Doc. 18, at 9-10.) I&M argues that this 

reading of the Limitation of Liability is endorsed in American Electric Power Company, Inc. v. 

Westinghouse Electric Corporation, 418 F. Supp. 435 (S.D.N.Y. 1975),2 a case involving the 

corporate parent of I&M, a predecessor in interest of Siemens, and a contract that is analogous to 

the Contract in this case. The dispute in Westinghouse involved damaged turbine rotors covered 

by a limitation of liability in the contract stating that under no circumstance would a remedy 

exceed the contract price. Id. at 459. The Westinghouse court held, however, that the limitation 

of liability remained enforceable even if repairs failed, because the contract “specifically 

 2

 The similar contract provision in Westinghouse provided that: “. . . The remedies of the 

purchaser set forth herein are exclusive, and the liability of Seller with respect to any contract, or 

anything done in connection therewith . . . whether in contract, in tort, under any warranty, or 

otherwise, shall not, except as expressly provided herein, exceed the price of the equipment of 

(or) part on which such liability is based.” Westinghouse, 418 F.Supp at 459. 

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provide[d] a damage recovery distinct from the warranty to repair or replace.” (Pl. Response, 

Doc. 18, at 10; citing Westinghouse, 418 F.Supp. at 458-59.) The court acknowledged the 

effectiveness of a limitation of liability, and found that under the facts of the case it did not stand 

independently of the contract’s warranty clause. Westinghouse, 418 F.Supp. at 457. 

 The Westinghouse court identified three factors that supported the enforcement of the 

limitation of liability in that case. First, the contract’s separate warranty remedy provision and 

limitation of liability provision expressed the parties’ “consensual allocation of business risk.” 

Id. at 458. It was the court’s view that this represented the parties’ intent and understanding that 

the failure of the warranty remedy would not void the liability limitation. Id. Second, the 

contract at issue was “not the type entered into by an average consumer, but rather a commercial 

agreement painstakingly negotiated between industrial giants.” Id. The court went on to note 

that the rule that an “agreed-upon allocation of commercial risk should not be disturbed is 

particularly appropriate where, as here, the warranted item is a highly complex . . . piece of 

equipment.” Id. In Westinghouse, as in the case sub judice, the machinery at issue was a multimillion dollar turbine generator, and it is for this reason that both contracts incorporated 

limitations on liability. Third, the plaintiff in Westinghouse was not left “without at least a 

‘minimum adequate remedy,’” which the court noted was perhaps the most important factor to 

consider. Id.

All three rationales are equally applicable to this case, thus supporting the enforcement of 

the similarly constructed Limitation of Liability. First, the parties expressly allocated and 

limited the risk above the Contract Price by inserting Article 22 into the Contract. Second, both 

I&M and Siemens are sophisticated companies contracting for the sale and repair of multimillion dollar turbine generators. The Contract was the result of carefully negotiated terms. 

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Finally, this Court finds that I&M received an adequate remedy because Siemens 

performed repair work up to the value of the Contract Price, as agreed upon in Article 22. Ohio 

Law provides that “[c]onsequential damages may be limited or excluded.” Ohio Rev. Code Ann. 

§ 1302.93(C) (West 2012). As such, “reasonable agreements limiting or modifying remedies are 

to be given effect.” § 1302.93, Official Comment. A provision that limits liability for “indirect, 

special, incidental or consequential” damages and limits liability to the “total price paid” under a 

contract is enforceable under Ohio Law. (Contract, Doc. 17, Art. 22); see also 7 Medical 

Systems, LLC v. Open MRI of Steubenville, No. 11-JE-23, 2012 WL 2522646 at *1, *7 (Ohio Ct. 

App. June 18, 2012). The bargained for Limitation of Liability provides a remedy up to the 

Contract Price for any direct damages suffered, and, therefore, I&M has a minimum adequate 

remedy. 

Thus, Defendant’s Motion to Dismiss Count I of Plaintiff’s complaint is therefore 

GRANTED. 

B. Breach of Warranty Analysis 

 In Count II, I&M alleges that the Warranty remedy provided in Article 13 of the Contract 

was breached because Siemens failed to repair or to replace the defective Major Equipment at its 

own expense. In the alternative, Count II alleges that even if Siemens did fully perform under 

the Contract and Warranty by invoking the limited exclusive remedy stated in the Warranty, then 

this warranty failed of its essential purpose and Siemens is responsible for the entire cost, 

without contractual limit, of remedying the damage caused by the equipment failure. 

(Complaint, Doc. 1, ¶ 26-27.) Siemens seeks dismissal of this claim on the grounds that: 

(1) I&M fails to allege breach of warranty because it ignores the application of the Limitation of 

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Liability; and (2) reliance on the Limitation of Liability does not cause the Warranty remedy to 

fail of its essential purpose. (Def.’s Reply Br., Doc. 21, 9.) 

1. Breach of Warranty 

To state a claim for breach of warranty under the Uniform Commercial Code (“UCC”) as 

adopted by Ohio, a plaintiff must allege: (1) the existence of a warranty; (2) the product failed to 

perform as warranted; (3) the plaintiff provided the defendant with reasonable notice of the 

defect; and (4) the plaintiff suffered an injury as a result of the defect. McKinney v. Bayer Corp., 

744 F. Supp. 2d 733, 753 (N.D. Ohio 2010). I&M claims that it has properly alleged breach of 

warranty because the Complaint alleges that a warranty exists, Siemens’ equipment failed to 

perform as warranted, I&M provided reasonable notice of the alleged defect by submitting a 

claim under the warranty, and I&M incurred damages because I&M paid for the repairs above 

the Contract Price. (Pl. Response, Doc. 18, at 11.) 

The parties specified in the Limitation of Liability section that neither party would be 

liable to the other under any theory, including warranty claims, for amounts in excess of the total 

price paid under the Contract. (Contract, Doc. 17, Art. 22.) I&M’s first allegation in Count II—

that Siemens failed to repair or replace the defective equipment at its own expense—ignores the 

purpose of the Limitation of Liability in Article 22 of the Contract. As this Court concluded in 

Section IV.A. supra, I&M misconstrues the enforceability of the Warranty Remedy in light of 

the parties’ agreed upon Limitation of Liability. 

I&M fails to allege a valid claim for breach of warranty because it ignores the application 

of Article 22, which limits Siemens’ liability under the general Warranty to the Contract Price. 

I&M’s first contention in Count II is thus without merit. 

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2. Essential Purpose of Warranty Remedy 

In the alternative, I&M argues that even if Siemens did fully perform under the Contract 

by invoking the limited remedy and requiring payment above the Contract Price, then this 

remedy fails of its essential purpose. (Complaint, Doc. 1, ¶ 27.) I&M argues that this failure of 

essential purpose makes Siemens responsible for the entire cost of the repair, including 

consequential damages. Id.3

 

 While the UCC provides a remedy for consequential damages, Ohio Law also allows the 

parties to agree to limit the buyer’s remedy. A seller may limit the buyer’s remedies for breach 

of warranty to the price necessary to repair or replace the nonconforming goods or parts. Ohio 

Rev. Code Ann. §§ 1302.93(A)(1) and 1302.29(D). Contractual provisions limiting or excluding 

consequential damages are permissible “unless the limitation or exclusion is unconscionable.” 

§ 1302.93(C). 

Courts are reluctant to find unconscionable limitations in commercial contracts, for there 

is rarely unequal bargaining power among the parties. § 1302.93(C) (“Limitation of 

consequential damages for injury to the person in the case of consumer goods is prima facie 

unconscionable, but limitation of damages where the loss is commercial is not.”). See Chemtrol 

Adhesives, Inc. v. American Mfrs. Mut. Ins. Co., 537 N.E.2d 624, 639 (Ohio 1989). Contracting 

parties are instead free to rely on the warranties and limitations they choose to place in their 

contracts. Id. at 638. As already discussed by this Court with regard to Count I, a bargained for 

“allocation of commercial risk should not be disturbed,” especially when “the warranted item is a 

highly complex” piece of equipment such as an expensive turbine. Westinghouse, 418 F. Supp. 

 3

 R.C. 1302.93(B) provides in part: “Where circumstances cause an exclusive or limited 

remedy to fail of its essential purpose, remedy may be had as provided in Chapters * * * [1301 

through 1309, inclusive] of the Revised Code.” 

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at 458. There is no allegation that I&M and Siemens entered into the Limitation on Liability 

under unconscionable circumstances. This Court can therefore presume that it was to the benefit 

of each party to include such a provision in the Contract to insure its interest in the complex and 

expensive equipment. 

Limited remedy provisions are common in contracts in order “to give the seller an 

opportunity to cure the defect” while simultaneously limiting excessive risk “by excluding direct 

and consequential damages.” Nat’l Mulch & Seed, Inc. v. Rexius Forest By-Products Inc., 2:02-

CV-1288, 2007 WL 894833, *29 (S.D. Ohio Mar. 22, 2007) (citing Abele v. Bayliner Marine 

Corp., 11 F. Supp. 2d 955, 960 (N.D. Ohio 1997)). A limited remedy may fail of its essential 

purpose when the seller is unable to repair and replace warranted goods and the buyer is left with 

no benefit. Id. at *28. This type of failure often occurs when the seller either refuses to repair 

the goods or is unable to cure a breach. Id. 

There is no evidence presented in the instant case that Siemens refused to repair or was 

unable to cure an alleged breach. While it is undisputed that Siemens requested payment above 

the Contract Price before it would continue its repair efforts, this limitation was included in 

Article 22 and therefore cannot be characterized as a refusal to repair the goods. (Contract, 

Doc. 17, Art. 22.) Contrary to I&M’s allegations, there is no evidence in this case to base a 

finding that Siemens was unable or unwilling to repair the Major Equipment within a reasonable 

time. (Pl. Response, Doc. 18, at 11.) 

 Siemens relied on its right to limit its liability to the Contract Price as set forth in the 

provisions of Article 22. (Complaint, Doc. 1, ¶ 15.) Paragraph two of the Limitation of Liability 

provides that “under no circumstances” shall the total liability of either party “exceed the total 

price paid.” (Contract, Doc. 17, Art. 22.) These provisions are binding on both parties, and 

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were designed to “prevail over any conflicting or inconsistent provisions set forth elsewhere” in 

the Contract, including the Warranty in Article 13. Id. Enforcement of the Limitation of 

Liability therefore complies with the essential purpose of the Contract’s terms. 

Because it does not fail of its essential purpose, the Limitation of Liability as applied to 

the Warranty remedy excludes incidental and consequential damages from I&M’s restitution 

claim against Siemens as alleged in Count III.4 Accordingly, this Court finds that both the 

“Warranty” and the “Liability Limitation” provision of the Contract are valid and enforceable. 

Thus, Defendant’s Motion to Dismiss Count II of Plaintiff’s Complaint is therefore 

GRANTED.

V. CONCLUSION 

 For the foregoing reasons, this Court GRANTS Defendant Siemens’ Motion to 

Dismiss Counts I and II of I&M’s Complaint. 

IT IS SO ORDERED. 

s/Algenon L. Marbley_________ 

ALGENON L. MARBLEY 

UNITED STATES DISTRICT JUDGE 

 

DATE: August 26, 2013

 4

 As such, this Court need not decide whether the exclusion of consequential damages 

would remain enforceable if the remedy had failed of its essential purpose. (Pl. Response, Doc. 

18, at 14.) 

Case: 2:12-cv-00861-ALM-NMK Doc #: 24 Filed: 08/27/13 Page: 16 of 16 PAGEID #: <pageID>